Through the acquisition of Synosia Therapeutics last year,
Turku, Finland-based Biotie gained access to several drugs in
development including SYN120, an Alzheimer’s medicine licensed
from Roche Holding AG in 2009. Roche has a one-time option to
take back rights for SYN120 after evaluating data from an early-stage study to be released this quarter, Veromaa said in a
telephone interview Feb. 16.

“A number of reputable, highly interested pharma
companies” have approached Biotie about the drug in the event
that Roche opts not to exercise the option, Veromaa said.

Biotie, GlaxoSmithKline Plc, Pfizer Inc. and Lundbeck are
among the drugmakers developing treatments to improve cognition
for Alzheimer’s patients by targeting 5-HT6 receptors in the
brain. About 18 million people worldwide have Alzheimer’s
disease, and the population may almost double to 34 million by
2025, according to the World Health Organization.

Blocking 5-HT6 receptors results in increased
concentrations of acetylcholine and glutamate, chemicals that
aid learning and memory processes, according to Biotie.

“5-HT6 appears to be one of the hot targets in terms of
symptomatic treatments for Alzheimer’s,” Veromaa said.
“Cognition improvement agents will be part of treatment
protocol for many, many years to come.”

Development Goals

Biotie rose 4.1 percent to close at 51 cents in Helsinki
trading, giving the company a market value of 197.7 million
euros ($262 million).

If Roche exercises its option, Biotie will receive an
undisclosed payment and will be eligible to receive additional
amounts if development and commercialization goals are met,
Veromaa said. Biotie also is entitled to royalties on sales.

Roche in September regained rights to another Alzheimer’s
treatment from Evotec AG, which will potentially receive $820
million if development and sales goals are met.

Evotec’s drug, EVT 302, is a disease-modifying therapy to
slow the illness’s progression rather than treating symptoms.
Future therapies for Alzheimer’s are likely to combine both
types of treatments, Veromaa said.

Biotie is awaiting regulatory approval for nalmefene, a
drug to reduce the urge to binge drink. Copenhagen-based
Lundbeck submitted it for European Union approval in December.
If the product is cleared, Biotie may receive as much as 84
million euros in payments from Lundbeck in addition to royalties
on sales. Lundbeck will present detailed late-stage study
results on March 5, Veromaa said.

Parkinson’s Drug

Biotie is also developing a treatment for Parkinson’s
disease, SYN115, which it licensed to Brussels-based UCB SA.
Biotie can receive as much as $370 million if goals for the
product are met, Veromaa said. Data will be presented from a
mid-stage study in the first half of next year, he said. UCB
owns 8 percent of Biotie.

The U.S. Department of Defense is funding clinical trials
for another drug, SYN117, to treat post-traumatic stress
disorder in civilian and military populations. About 300,000
soldiers returning from Afghanistan and Iraq, or about one fifth
of veterans from those conflicts, suffer from the disorder,
according to the Rand Corp. Eight percent of the U.S. civilian
population is also affected, Veromaa said.

Credit for Pipeline

Biotie’s stock is undervalued because investors aren’t
taking those partnerships into account, said Otello Stampacchia,
managing partner of Omega Funds, which invests in Biotie. “We
like the caliber of their collaborations and their portfolio,
which is diversified,” he said. “At the moment, the market is
only looking at nalmefene. I don’t think people are looking at
the pipeline at all.”

Given its relationships with Roche, Lundbeck and UCB,
should any of the products in collaboration prove to be
commercially successful, a takeover of Biotie “would definitely
be a possibility several years out,” said Samir Devani, an
analyst at Nomura Code Securities Ltd. in London who recommends
buying the shares.

Biotie ended an agreement in October to acquire Newron
Pharmaceuticals SpA after Merck KGaA said it would return full
global rights for safinamide, a treatment for Parkinson’s
disease, back to the Italian biotech company in April. Biotie is
looking at other opportunities in neurological disorders,
Veromaa said.

“We’ve tried to do our share in consolidating the industry
into more fundable entities that can then develop into
sustainable companies,” he said. “That’s why we have a rather
broad pipeline with highly differentiated products.”